Sales Of Tylenol Make A Speedy Recovery

July 8, 1986|By New York Times

NEW YORK — In February a cyanide-laced Tylenol capsule killed a woman in Yonkers, N.Y., leading Johnson & Johnson to remove all capsule forms of the product from the market. But Tylenol kept its position as the nation's best-selling analgesic and five months later is selling 96 percent of what it sold before the tampering, the company says.

The rebound, after sales fell by one-third, was even swifter than its recovery following a poisoning episode in 1982, in which seven people died in the Chicago area.

''I don't know that there's a case on record of a brand that has taken two shots to the head like that and come right back,'' said Benjamin Lipstein, chairman of National Brand Scanning Inc., a market-research concern.

As increasing numbers of companies are facing product tampering, the story of Tylenol's performance provides a case study of effective crisis management. The company now holds 31.7 percent of the $1.7 billion market for pain relievers, compared with 33 percent before the poisoning.

Johnson & Johnson executives and analysts attribute the Tylenol comeback to several elements. Partly, they say, the negative effects of the tampering were ameliorated by a continuing wave of poisonings involving other products, which made it clear that Tylenol itself was not the problem.

But much of the success, according to analysts, stemmed from Johnson & Johnson's quick action after pulling Tylenol capsules off the market. It had new TV commercials on the air within days and started a huge coupon promotion to revive sales.

In addition, a risky move on Johnson & Johnson's part -- ending sales of all of its over-the-counter capsule products while competitors continued to sell them -- proved astute, industry analysts said. In place of the capsules, the company promoted caplets -- coated, solid tablets that are more resistant to tampering.

While the company risked alienating those those who prefer capsules, it headed off the possibility of more tampering -- a possibility that became a reality for other drug companies.

SmithKline Beckman Corp., for example, pulled Contac, Dietac and Teldrin capsules off the market for several months after rat poison was found in some of them in Orlando and Houston in March. And Bristol-Myers Co. last month stopped selling its brands in capsule form after two deaths in a suburb of Seattle were linked to cyanide placed in Extra-Strength Excedrin capsules.

Having weathered the Tylenol episode -- which Johnson & Johnson says will cost it $100 million to $150 million this year after taxes -- the company now faces a more typical marketing challenge.

A new generation of analgesics made of ibuprofen, which until last year had been available only by prescription, has entered the market, joining the aspirin and acetaminophen products. Tylenol is an acetaminophen.

Like the other analgesics, ibuprofen is used to relieve the pain of headaches, menstrual cramps, hangovers, fever and joint inflammation. Like aspirin, ibuprofen can reduce tissue swelling; acetaminophen products are not anti-inflammatory. While aspirin brands so far have been the major losers to ibuprofen, some analysts think that acetaminophen brands, including Tylenol, are vulnerable.

As marketing activities return to normal, Johnson & Johnson is devoting more attention to ibuprofen, introducing Medipren in the fall.